Seven Steps for Creating an Intelligent FP&A Process

Leading the processes that underpin financial planning, budgeting, and forecasting, Financial Planning & Analysis (FP&A) today is a vital element within successful businesses. Despite its importance, many organizations still lack the speed and agility across FP&A to match the challenges and volatility of the current climate. Finance professionals continue to rely on outdated and unfit activities, leaving the Office of Finance unprepared. 

To initiate change, finance teams need to understand how they can intelligently transform FP&A with a digital-first approach. Guiding this initiative is the FP&A Maturity Model – offering seven steps to take FP&A from inadequate to best-in-class. Supporting this article, we have also provided you with a link to a webinar session that explains the origin and intent of creating this model, feedback and lessons learnt from survey responders and how to start the process using the information.
What is the FP&A Maturity Model? 

The FP&A Board Maturity Model is a process and guide to help businesses reach a “leading state level of maturity” and achieve best-in-class FP&A. To cope with market uncertainty from all the recent shifts taking place, businesses can follow the model (regardless of size, industry, and geography) to assess where they are in terms of planning and analysis and how they can improve.

The model assesses six categories to provide a maturity level for each – from Level 1 (the most basic) to Level 5 (where FP&A aspires to be). The categories are: 

1. Leadership
2. Functional Skills
3. Business Partner and Collaboration
4. Process
5. Data & Analytics
6. Technology 

In essence, the higher the level of maturity across each category, the closer the business is to best-in-class FP&A and the better armed it is to cope with an uncertain and hard to predict future.

Applying the insight learned from FP&A Trends’ extensive research and the views collated from thousands of finance professionals, reaching a leading state of maturity (i.e., Level 6) can be best achieved in seven steps: 

1. Set the vision (this is primary and the most important step in the process)

Following the example of businesses that have attained a best-in-class status, the transformation project always starts with the vision of what planning could be. Backed by senior management (an extremely important element of the entire project), the optimal planning approach is one that incorporates a culture of collaboration and integration. 

An integrated management process covers: 

• Adopting planning agility that responds to events as they occur rather than reacting
• Creating a team of subject experts to lead the integration of strategic, financial, and operational planning processes 
• Going beyond financial planning to link operational activities with strategic goals (also known as Extended Planning & Analytics, or XP&A) 
• Ensuring senior-level support is in place to drive the correct culture across the enterprise 

2. Identify suitable business partners

A transformation project of this scale is all but impossible to achieve by a single person or department. Identify business partners to work on the project and move it forward. 

3. Run the pilot project

Running a pilot project in an individual business unit or division is a good way of garnering its impact and gaining support. However, it is important to have people with extensive operational knowledge or the certain skills, such as IT or specialist fields such as AI and Machine Learning. 

4. Data management

Data management is a big issue for many organizations. High volumes of spreadsheets and silos make it incredibly complex to maintain control and increase the risk of errors. Put simply, data quality and management must be exemplary and agile to ensure that transformation can take place. 

5. Automate

Automation is key to unlocking FP&A time. Too much time, as noted above, is spent on low-value tasks such as loading data, maintaining spreadsheets, writing reports, and much more. Automation can make these activities much simpler to undertake and far faster to complete.

6. Transformation takes time

A complete transformative overhaul will take time. There is no escaping this reality, but it can be planned for. Each step is precisely, a step towards the final desired result. Trying to do them all at once will result in failure but following the process step-by-step will deliver top results.

7. Try, fail, learn

The last point is that intelligent transformation is a learning process. Each business will uncover different challenges to achieving the perfect state and many will experience failures from time-to-time. They key here is to learn and adapt to perpetually move forward. 

To learn more about Intelligent Planning Using the Maturity Model, Board will be hosting a webinar on November 10, 2022. To learn more about the organization’s hierarchy in the maturity process and the steps in detail, you can download the research study published by the FP&A Trends Group and complete an online assessment on the Board website to start your FP&A transformation process – from manual to an intelligent state.